[Federal Register Volume 64, Number 2 (Tuesday, January 5, 1999)]
[Notices]
[Pages 477-479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-131]
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DEPARTMENT OF COMMERCE
International Trade Administration
Multi-Agency Business Development Infrastructure Mission to China
and Hong Kong, and Business Development Mission to Korea
AGENCY: International Trade Administration, Commerce.
ACTION: Notice of mission statement.
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I. Description of the Missions
The Department of Commerce announces that Secretary of Commerce
William M. Daley will travel to South Korea March 10-13, 1999, for a
business development mission, and to China and Hong Kong March 14-20,
1999, to lead a multi-agency business development infrastructure
mission.
China/Hong Kong. The multi-agency infrastructure mission to China,
which was announced during the Presidential Summit in June of this
year, is designed to include cabinet and other senior officials
representing infrastructure-related agencies in the U.S. Government.
The business development mission will include large, medium, and small
firms representing sectors such as, but not limited to, information
technologies, power generation, oil and gas exploration and downstream
development, construction including residential dwellings, environment,
transportation, and engineering and financial services in support of
efforts to involve more U.S. companies in China's infrastructure
development. The Secretary, cabinet agency representatives, and mission
members will stop in Hong Kong to pursue substantial infrastructure
opportunities there and to meet with Hong Kong officials and local U.S.
business.
As currently envisioned, the mission will travel to Beijing, Hong
Kong, and two other cities to be determined. The itinerary in Beijing
will largely consist of bilateral policy meetings with Chinese senior
economic officials, of forums on trade initiatives and issues, and of
meetings for U.S. participating firms with key decision makers in
relevant ministries and organizations. Outside of Beijing, we envision
site visits to key infrastructure projects and to joint ventures
between U.S. firms and local firms, round table discussions with senior
economic development officials, and matchmaking business appointments
for mission participants.
The mission also presents an opportunity to implement a number of
other commercial initiatives announced during the Presidential Summit
in June. The state and non-state enterprise forum, the housing,
insurance, e-commerce, environment, and aviation initiatives will
receive focus and attention during the visit.
Korea. Building on the momentum of President Clinton's November
1998 visit to Korea in which Secretary Daley participated, the mission
to Korea will broaden commercial ties and help U.S. companies take
advantage of opportunities arising out of Korea's economic reform
program. The mission will fulfill President Clinton's commitment to
President Kim Dae Jung that Secretary Daley will bring a mission to
Korea and demonstrate the Administration's support for Korea's recovery
and restructuring efforts.
The mission to Korea will bring U.S. companies to this market at a
time when it is poised for recovery and is making unprecedented changes
in the way business is done. Despite the current economic slowdown,
there are many good opportunities for U.S. firms willing to look for
and pursue them. Exporters need to be creative with financing and to
identify instruments addressing short-term liquidity problems,
including U.S. Government institutions such as the Export-Import Bank.
In Korea, the focus will be on commercial opportunities, including
those presented by the continuing IMF-mandated economic reform program.
The Secretary will meet with government officials to discuss bilateral
concerns, advocate for U.S. commercial interests, and advance other
relevant policy initiatives. Briefings and matchmaking business
appointments will be made for members of the business delegation.
Individual country briefings will include local public and private
sector officials to discuss developments in the country that affect the
commercial environment.
The mission will depart Washington on March 10. One group will
visit Korea March 12-13 and a second group will visit China March 14-
20.
[[Page 478]]
II. Commercial Setting for the Missions
China is considered to offer the lion's share of future growth in
sales of goods and services for many American companies. Exports
reached $13 billion and imports, $62.5 billion in 1997. China has
become our fourth largest trading partner and supplier of imports.
China is our fifteenth largest destination for U.S. exports. Since the
mid-1980s when U.S. trade with China began to grow substantially, U.S.
imports from China have continually outpaced U.S. exports to China.
This has resulted in a large and growing trade deficit, now our second
largest deficit after Japan. The deficit has grown four times since
1990 ($10.4 billion) to $49.7 billion in 1997, and is projected to
reach $58 billion in 1998.
Beijing is the capital and the locus of much of the decision making
on infrastructure development, as well as on trade policy. Besides
Beijing, two other stops with significant infrastructure opportunities
will be selected.
Hong Kong, which reverted to Chinese sovereignty on July 1, 1997,
is now a Special Administrative Region (SAR) of China. HK SAR operates
under the late Deng Xiaoping's ``one country, two systems'' model
wherein HK SAR continues largely with its way of life with minor
modifications. A chief executive, Tung Chee Hwa, chosen by a
``Selection Committee'' of 400 people, now presides over the
government. The HK SAR is a separate customs territory, maintains its
own freely convertible currency, enjoys independent status in the WTO
and other multilateral and bilateral fora, and continues with one of
the most open and free market based economies in the world today. China
is responsible for Hong Kong's defense and foreign affairs.
Hong Kong's most significant challenge currently is the Asian
financial crisis, which has resulted in a drop of some 50 percent in
real estate prices, and over 60 percent in stock prices. Recent
measures by the HK SAR government to defend the Hong Kong dollar
against speculative attacks and to stabilize the stock market through
the direct purchase of shares appear to have had a positive effect,
with interest rates returning to normal levels and the Hang Seng Index
recovering by over 30 percent since the government's intervention. Hong
Kong is our 11th largest destination for exports. The U.S. ran a $4.8
billion trade surplus with Hong Kong in 1997. The American Chamber of
Commerce in Hong Kong is the largest U.S. chamber outside of North
America, with approximately 2,600 members.
Before the financial crisis hit Korea in the fall of 1997, Korea
was our fifth largest export market, accounting for $25 billion in
exports and a $2 billion trade surplus that year. Under the auspices of
the $58 billion stabilization package put together last winter under
IMF leadership, financial markets in Korea have stabilized and
recovered somewhat from last winter's lows. The domestic economy,
however, has gone into recession. Unemployment has tripled over the
past twelve months, while real GDP could fall by as much as 7 percent
this year. There are signs, however, that the economy will soon turn
the corner. A number of forecasters expect a return to positive growth
in the second half of 1999.
Korea has made tremendous progress in its reform program,
particularly in the areas of capital account liberalization and
financial sector restructuring. Corporate restructuring remains the
linchpin to recovery yet is also the most difficult area of reform for
the government to influence.
The recession combined with the scarcity of trade financing has
severely affected U.S. exports to Korea. Exports for January-October
1998 are down 42 percent from the same period in 1997. U.S. imports
from Korea were up 2 percent. During President Clinton's November visit
to Korea, the Export-Import Bank committed another one billion dollars
in medium term credits for Korea, bringing Ex-Im's total short and
medium term commitments to $4 billion for 1998.
III. Goals for the Missions
The missions will further both U.S. commercial policy objectives
and advance specific business interests. They are aimed at:
Expanding U.S. exports to China's and Hong Kong's priority
infrastructure development sectors and projects; underscoring the need
to reduce our growing trade deficit with China, estimated to be $60
billion in 1998;
Implementing commercial initiatives agreed to during the
June Summit and the 12th session of the U.S.-China Joint Commission on
Commerce and Trade;
Advocating on behalf of U.S. firms already active in
China, Hong Kong, and Korea;
Resolving market access issues for U.S. companies in all
locations;
Maintaining visibility for U.S. companies wishing to gain
or maintain a foothold in the Korean market once recovery begins; and
Demonstrating U.S. support for continued enterprise,
financial and corporate reforms in China and Korea.
IV. Scenario for the Missions
The mission to China and Hong Kong will emphasize the need for
greater U.S. participation in China's and Hong Kong's infrastructure
development and advance outcomes and initiatives agreed to during the
U.S.-China 1998 Summit. The mission to Korea will emphasize the long-
term U.S. business interest in the country and reaffirm the
Administration's positive view of the economic reforms occurring under
President Kim's administration and the IMF stabilization package.
Briefings and matchmaking business appointments will be made for
members of the business delegation. The business of the mission will
consist of:
Embassy briefings on the economic/commercial climates;
Meetings with Ministers and other senior level government
officials with responsibilities for the mission's focus sectors;
Meetings with potential buyers, agents/distributors and
partners.
Meetings with the U.S. business community.
Forums, roundtables, and other policy focused discussions
with senior economic decision-makers.
The Secretary will meet with the leadership and other government
senior officials and with U.S. business representatives in all three
locations. In China, the Secretary will underscore the need for greater
market access in key sectors, to reduce our growing trade imbalance
with China, and to advocate for U.S. firms bidding on China's priority
infrastructure development projects. The Secretary will urge continued
progress from China in meeting both market access and other demands of
the WTO accession process. In Hong Kong, the Secretary will likely meet
with the Chief Executive of the SAR and other senior leaders to signify
continued strong U.S. interest in the integrity of Hong Kong's autonomy
and free market system under the ``one country, two systems''
sovereignty arrangement with China. He will also urge selection of U.S.
firms for Hong Kong's infrastructure efforts with $30 billion in
projects to be developed over the next five years. Additional forums on
the free market system and China's reform agenda for state and non-
state enterprises, housing, commercial law and other topics are
possible.
While in Korea, the Secretary will emphasize U.S. market access
concerns, advocate on behalf of U.S. companies, promote bilateral and
multilateral trade
[[Page 479]]
policy objectives, and reiterate USG support for Korea's economic
reforms, while stressing that continued reforms are key to maintaining
economic, political and commercial momentum. He will also co-chair a
meeting of the U.S.-Korea Committee on Business Cooperation (CBC).
V. Criteria for Participation of Companies
The recruitment and selection of private sector participants in
each mission will be conducted according to the Statement of Policy
governing Department of Commerce-led trade missions announced by
Secretary Daley on March 3, 1997. Participants will be selected
separately for the China/Hong Kong business development infrastructure
mission and for the Korea business development mission and should fill
out separate applications for each mission. Companies may apply for
either or both missions, and will be selected according to the criteria
set for below. Approximately 15 companies will be selected for the
China/Hong Kong business development infrastructure mission and
approximately 10 companies will be selected for the Korea business
development mission. Selection for one mission does not confer priority
for selection for the other mission.
Eligibility
Participating companies must be incorporated in the United States.
A company is eligible to participate only if the products and/or
services that it will promote on the relevant mission either (a) are
manufactured or produced in the United States; or (b) if manufactured
or produced outside the United States, are marketed under the name of a
U.S. firm and have U.S. content representing at least 51 percent of the
value of the finished good or service. (At the discretion of the
Department, which will generally be exercised on a mission-specific and
sector-by-sector basis, the 51 percent U.S. content requirement may be
modified or waived.)
Selection Criteria
Companies will be selected for participation on the basis of:
Level of seniority of designated company representatives
and its appropriateness to the mission objectives;
Relevance of a company's business and product line to the
plan and objective of the mission (see below);
Past, present and prospective business activity in Asia,
particularly in China, Hong Kong and/or Korea, as applicable; and
Diversity of company size, type, location, demographics
and traditional under-representation in business.
In addition, the Department may consider whether the companies'
overall business objectives, including those of any U.S. or overseas
affiliates, are fully consistent with the missions' foreign and
commercial policy objectives.
Participants in the China portion of the mission will be drawn from
several infrastructure sectors, including, but not limited to, the
following:
Environmental technologies,
Information technologies/telecommunications,
Housing construction and building materials,
Power generation,
Oil exploration and development,
Transportation, and
Engineering and financial services.
Companies for the Korea portion of the mission will be drawn from
several sectors, including, but not limited to, the following:
Environmental technologies,
Information technologies/telecommunications,
Infrastructure, and
Energy.
An applicant's partisan political activities (including political
contributions) are irrelevant to the selection process.
VI. Time Frame for Applications
Applications for the business development mission to China and
Korea will be made available beginning on or about January 4, 1999. The
fees to participate in these missions have not yet been determined. The
fees will not cover travel or lodging expenses. For additional
information on the trade missions or to obtain an application, business
persons should be referred to Lucie Naphin, Director of the Office of
Business Liaison, or Jennifer Andberg, Office of Business Liaison, at
202-482-1360. Applications should be submitted to Lucie Naphin by
February 1, 1999, in order to ensure sufficient time to obtain in-
country appointments for applicants selected to participate in the
mission. Applications received after that date will be considered only
if space and scheduling constraints permit.
Dated: December 29, 1998.
Lucie Naphin,
Director, Office of Business Liaison.
[FR Doc. 99-131 Filed 1-4-99; 8:45 am]
BILLING CODE 3510-25-P
